The Harsh Reality of Mobile App Monetization: Most Apps Fail to Reach $1,000/month Revenue within Two Years
As mobile app developers, we’ve all been there – struggling to make ends meet, trying to convince users to subscribe to our app, and wondering why our revenue isn’t growing as expected. A recent report from RevenueCat, a mobile app subscription tool kit, sheds light on the harsh reality of mobile app monetization. According to the report, most apps fail to reach $1,000 in monthly revenue within their first two years. Yes, you read that right – most apps.
The report analyzed data from over 75,000 mobile apps, covering more than $10 billion in revenue across over a billion transactions. The findings are staggering. Across all categories, nearly 20% of apps reach $1,000 in revenue, while only 5% reach the $10,000 mark. The revenue drop-off is steep, with many categories losing around 50% of apps at each milestone, emphasizing the challenge of sustained growth beyond early revenue benchmarks.
But what’s even more concerning is that apps that do eventually make it to $1,000 in monthly revenue tend to do so quickly. The median number of days it takes for an app to reach $1,000/month in revenue is just 60 days. However, this stat varies based on the type of app. Education apps, for example, have a median of 79 days, while lofty monthly revenue goals of $10,000/month are especially hard to reach for shopping and travel apps.
The report also highlights the widening revenue gap between the top 5% of apps by revenue and the other 95%. In 2024, the top 5% of apps in most categories made 200 times more revenue than the rest. In this year’s report, that stat jumped to 500 times. This means that the top-performing apps are leaving the rest far behind.
Another interesting finding is that 76.1% of devs in North America make over 80% of their revenue from iOS apps. This highlights the importance of having a strong presence on both iOS and Android platforms.
So, what does this mean for app developers? The report suggests that developers will continue to face challenges around subscription renewals, with barely 10% of payers reaching the second year on monthly plans and less than 5% making it to month 6 on weekly plans. As a result, developers are expected to continue pushing for more ways to make ends meet, including more paywalls, upsells, and maybe even some price hikes.
Actionable Insights
- Focus on early growth: With the median number of days it takes for an app to reach $1,000/month in revenue being just 60 days, it’s crucial to focus on early growth and monetization strategies.
- Diversify your revenue streams: With the widening revenue gap between the top 5% of apps by revenue and the other 95%, it’s essential to diversify your revenue streams and not rely solely on subscriptions.
- Optimize your pricing strategy: With price increases not being a reported reason for cancelations, it’s crucial to optimize your pricing strategy to ensure that it’s competitive and appealing to your target audience.
- Invest in subscription renewal strategies: With barely 10% of payers reaching the second year on monthly plans and less than 5% making it to month 6 on weekly plans, it’s essential to invest in subscription renewal strategies to retain your users.
Conclusion
The report from RevenueCat paints a picture of the challenges related to monetizing mobile apps across different types of categories. While the findings may be discouraging, they also highlight the importance of focusing on early growth, diversifying your revenue streams, optimizing your pricing strategy, and investing in subscription renewal strategies. By understanding these challenges and adapting to the changing landscape, app developers can increase their chances of success and achieve their revenue goals.